Block 22/12, Beibu Gulf

HZN_China-Beibu_Proposed-Development-CNOOC_WEB_October-2016

 

Participating interests in the Beibu Gulf Development Project are:

Exploration

Production and Development

Horizon Oil (Beibu) Ltd and Petsec Petroleum LLC (wholly owned by Horizon Oil Limited)

55%

26.95%

CNOOC Limited

0%

51.0%

Roc Oil (China) Company

40%

19.6%

Oil Australia Pty Ltd (Majuko Corp)

5%

2.45%

 

Production from the Beibu Gulf fields continued strongly, averaging 8,150 bopd gross over the period, of which Horizon Oil’s share was 3,020 bopd, including cost recovery under the Petroleum Contract. The Company’s remaining entitlement to cost recovery oil at 30 June 2017 was US$89.6 million, the unrecovered balance of which escalates at 9% per annum.

 

Preparation of the Overall Development Plan for the WZ 12-8E and associated fields progressed well, and we hope to reach a Final Investment Decision later this year. The plan is to develop these fields in stages, utilising a leased mobile production platform, connected by flexible flow-lines to existing facilities at the WZ 12-8W field.

 

Because of the add-on nature of the development and the use of leased equipment, Horizon Oil’s share of capital expenditure will be modest and phased. As shown in the graph on the following page, it is the combination of production from the existing Beibu Gulf fields, future production from the WZ 12-8E development and the cost recovery production entitlement that drives the Company’s cash generation through 2022.

 

The production profile will be further supported by a workover program involving six wells in the existing producing fields, which is currently underway with the Haiyang 943 drilling rig. After the workovers are completed, two infill wells will be drilled on the WZ 12-8W field to further enhance production.

 

With cash operating costs per barrel sold of US$7.54, the producing fields generated high margin net operating cashflow of US$43.5 million.

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